Capital Budgeting9

Capital Budgeting9 - Year Sales Fixed Costs Variable Costs...

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Old Exam Questions - Capital Budgeting Page 51 of 55 Pages Year 0 1 2 3 4 Sales $5,000,000.00 $8,000,000.00 $8,000,000.00 $5,000,000.00 Fixed Costs -$300,000.00 Variable Costs -$3,000,000.00 Depreciation -$1,138,500.00 EBIT Interest EBT Taxes (40%) NOPAT Depreciation $1,138,500.00 OCF NOWC Initial Investment Shipping Salvage Tax on Salvage Total GFA FCF PV NPV A. $1,679,046.34 B. $1,521,061.92 C. $1,600,054.13 D. $1,758,038.55 E. $1,442,069.71 84. You are given the following cash flow information for a project. Given this information, and assuming that the correct risk-adjusted discount rate (WACC) to use is 12 percent, determine the net present value of this project. (Hint: you may also wish to solve for IRR for use with the next problem). Year Cash Flow Present Value 0 -$10,000.00 1 $8,000.00 2 -$4,000.00 3 $9,000.00 4 $8,000.00 5 -$3,000.00 Total A. $2,643.93
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Old Exam Questions - Capital Budgeting Page 52 of 55 Pages B. $3,467.46 C. $2,918.44 D. $3,741.97 E. $3,192.95 85. You are given the following cash flow information for a project. Given this information, and assuming that the correct risk-adjusted discount rate (WACC) to use is 12 percent, and that the firm’s true reinvestment rate is also 12 percent, determine the difference
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This note was uploaded on 07/13/2011 for the course FIN 4414 taught by Professor Staff during the Spring '08 term at University of Florida.

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Capital Budgeting9 - Year Sales Fixed Costs Variable Costs...

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